How To Control Warehouse Shrinkage

Learning how to control warehouse shrinkage effectively is the primary job of an inventory control professional. Generally speaking, "shrink" is an industry term that denotes the loss of otherwise saleable inventory due to theft, damage or expiration.

Find out how to control warehouse shrinkage by getting together a few bits of information first:

  • Up to date warehouse inventory count
  • Shipping manifests
  • Receiving manifests
  • Roster of workers
  • Shrinkage data covering twelve months

Once these facts are readily available, it is time to come up with a way that will efficiently curtail any further losses.

  1. Determine acceptable levels of shrink. Understanding how to control warehouse shrinkage requires a solid grip on the anticipated level of lost merchandise. For example, if the warehouse stocks perishable items, it is only natural for some of the inventory to expire before it can be shipped to buyers.
  2. Research extraordinary inventory losses. If a warehouse stores flowers and other live gardening materials, it may realistic to expect between seven and ten percent shrink. If the data shows that inventory losses are closer to the twenty percent level, it is time to ask some questions that lead to answers how to control warehouse shrinkage. In the case of perishable goods, improper storage, inefficient stock rotation and failure to maintain optimum conditions can greatly increase losses.
  3. Take frequent inventory. Know what should be on the shelves and check to see what is actually there. If the discrepancies rise and fall erratically, compare them to the work roster for the days that spikes occur. There is a chance that learning how to control warehouse shrinkage may require you to find out how to go about catching a thief.
  4. Trace shrink to specified points in time. If you rule out theft, there is a chance that the loading and check-in manifests do not match. Find out if shrink is actually little more than an inaccurate loading count that shows up (on paper) as missing inventory.

Tread lightly when first working out how to control warehouse shrinkage. Do not accuse workers of substandard performance, theft or improper inventory maintenance practices. Instead, ask a lot of questions, let the numbers do the talking and visually inspect the warehouse.

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